Nornickel's Vladimir Potanin: Dividend Payouts and Capex Investments Must Be Rebalanced

Capital expenditures, such as investments into the renovation of production technologies and industrial safety, must be brought to a higher level than dividend payouts - said Vladimir Potanin, president of Norilsk Nickel, in an exclusive interview to Interfax news agency. Norilsk Nickel, as one of the leading performers in the Russian economy, was among the prime targets for the recent government's move to introduce additional taxes on high dividend payers among the metal and mining companies, which has been just postponed till 2023.

"The government gave Norilsk Nickel time to bring its dividend policy in line with the expectations of the society and the authorities. That's why we have to revise the dividend formula to make the social payments unambiguously higher than dividends while maintaining a certain level of profitability for shareholders," - Vladimir Potanin said.

While the Company is steadily delivering on its effort to maintain a high level of profitability, it is continuously taking CapEx as front and center to address its 2014 policy to drastically reduce its environmental footprint, increase the well-being of its workforce, the indigenous populations, and the transition to the green economy.

CapEx investments of Norilsk Nickel increased by 33% last year and amounted to $1.8bl - due to the growing investments in infrastructure modernization and industrial safety. The Company forecasts its CapEx at US$3bl for 2021, and US$4 billion over the two years after, followed by an average of US$2bl per year until 2030. RUSAL, a 27.8% shareholder in Nornickel, is a stringent opponent of Nornickel's move to update its dividend policy to balance it with CapEx. It has blocked Nornickel's attempts to make such revisions repeatedly, including this year.

"Business has to get used to the idea that part of its social license is not only in paying taxes, social programs and following ESG rules, but also answering the challenges that society poses to it. And if today there is a fairly acute challenge in the fight against poverty, closing the gap between the poor and the rich, then it is necessary to answer it. Nornickel is bound by the shareholder agreement in force until 2023, but changes are inevitable when it expires," - Vladimir Potanin commented further.

MMC Norilsk Nickel is a diversified mining and metallurgical company, the world's largest producer of palladium, high-grade nickel, and a major producer of platinum and copper; it also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, sulphur and other products. Nornickel shares are listed on the Moscow and Saint Petersburg Stock Exchanges; ADRs are traded over the counter in the U.S. and on the London, Berlin and Frankfurt Stock Exchanges.

In a world's first this year, Nornickel launched a carbon-neutral nickel output, in line with its 2014 ESG strategy to reduce its environmental footprint, including the use of renewable energy sources, which has been certified by international auditors, EY and Sphera GmbH.

Contact: Tatyana Egorova, pr@nornik.ru

Source: MMC Norilsk Nickel

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Categories: Metals, Mining

Tags: CapEx, carbon-neutral nickel, Nornickel, Social License, Vladimir Potanin